'Global recession' in sight, says WTO director-general

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“Global recession” in sight, says WTO Director General

WTO chief Ngozi Okonjo-Iweala says 'central banks really have no choice' but to raise interest rates to try to contain inflation.

The Director General of the World Trade Organization (WTO) on Tuesday predicted a “global recession” as the world is in the grip of “multiple crises”.

S& #x27;Speaking at the opening of the WTO's annual public forum in Geneva, Ngozi Okonjo-Iweala stressed that the organization had previously expected a post-pandemic recovery.

But now we face what looks like an approaching recession, she said, before clarifying that it was ;a global recession.

“I think that's where we're headed. But at the same time, we have to start thinking about recovery. We need to restore growth.

— Ngozi Okonjo-Iweala, Director General of the World Trade Organization

She nevertheless underlined that the situation was very difficult, with the world facing multiple crises. Insecurity, climatic shocks, rising food prices, so many simultaneous exogenous shocks that are weakening the world, according to the boss of the WTO.

But we must reflect on what we have to do, to the policies we have to pursue to restore growth, she said.

In the short term, her first concern was how to ensure food security in the world, she also explained, saying that she was also concerned about energy access issues.

The OECD (Organization for Economic Co-operation and Development) sharply downgraded its global growth forecast for next year on Monday in the face of the more lasting than expected effects of the conflict in Ukraine and the rise in unemployment rates. #x27;interest of central banks in containing inflation.

The head of the WTO is of the opinion that it is necessary to know whether inflation is caused by high demand or whether the rise in prices is linked to structural reasons on the supply side.

Commenting on the rise in policy rates, Ms. Okonjo-Iweala argued that central banks have little choice but to raise them due to inflation.< /p>

But she pointed out that these increases have rather serious effects on developing countries which will see their debt increase.

She also insisted on the importance for central banks to clearly determine whether inflation is caused by strong demand or whether the rise in prices is linked to structural reasons on the supply side .

If these are supply-side factors over which you have no control, continue to increase supply rates. #x27;interest is counterproductive, she said. you.

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